How to save money: The Christmas budgeting trick that will save you money in the New Year

Everyone wants to make the most of the Christmas period and the exciting run-up to the big day, but the season can take its toll on your finances if you get carried away.

With the hordes of presents you feel you may have to buy, the Secret Santa gifts amongst friends, and the endless Christmas reunions with old pals, it’s easy to lose track of what you’re spending.

But with simple tricks and budgeting, there are ways to ensure you’re not struggling when it comes to the New Year.

Paul Osborn, Chief Executive at Foresters Friendly Society, shared his advice with on how to make sure your bank account is in good shape come January and how to recover financially after a splash-out season.

“Use the post-Christmas period to get your financial life in order and identify the areas where you need a little more support managing your money,” he advised.

“It’s often overlooked but making small changes such as swapping fancy meals for packed launches can make a big difference. The money saved can be put towards more meaningful goals like a holiday, home renovation or even boosting your pension. 

“Keeping track of your outgoings is crucial, rolling memberships or subscription costs can quickly add up. One way to nip this in the bud is by making a weekly or monthly ‘money date’. It may sound a little cliché, but committing to regular reviews of your finances can keep you on top of living costs and help you avoid nasty surprises.”

Paul also shared his top five tips on how to keep Christmas spending down:

Make a list (and check it twice)

Paul warned: “Last-minute impulse buys are often the most expensive, so it pays to plan. Keep in mind a budget per friend or family member and stick to it! Remember, quality time with loved ones is what the season is about – not blowing your savings on the big day!”

Be a discount detective

It’s not hard to find out which store is offering the cheapest deal on an item you want, and Paul advises you shop around before forking out.

He explained: “Don’t even think about buying presents, drinks or food before shopping around for the best deal. From online discount codes to price-comparison websites and seasonal sales, there are plenty of ways to track down the lowest price tag for your purchase. 

“However, make sure you’re mindful of any pitfalls and research the deals you’re getting to see if they’re worth spending your money on in the first place.”

Swap shop

Most of us have unwanted gifts stashed away at the back of our cupboards, and one suggestion from the finance expert is to pass them on to others.

He said: “The unwrapped gift box of smellies from your great-aunt might not be your thing but could be the perfect gift for a friend or colleague.”

The personal touch

Many people are choosing to gift their friends or family their time, instead of a Christmas gift.

Paul continued: “Often, it means more to your loved ones to spend quality time than give a gift, plus it makes for a personal present with a difference. For example, you could give some festive ‘gift cheques’ offering anything from ‘I’ll teach you how to knit’ or ‘I’ll take you out for tea and cake’.”

Start saving for the future

“Money is a popular gift at Christmas, particularly for children to spend or save, and taking advantage of saving vehicles like the Junior ISA will ensure you get the most out of it,” Paul added.

“Setting a savings account up early will mean a larger amount is saved for the future, whether that’s for a car, holiday or even university and could provide the perfect alternative Christmas present to a sack full of plastic toys.”